First Time Buyer - Confused

Leilab

Hi Everyone,

Sorry if there is a thread open at the minute for this question. Me and my partner are looking to apply for a joint mortgage next year after saving for what feels like a lifetime to buy our first house.

I am getting nervous now however about our credit score and the chances of getting us a mortgage. We are both 25 and neither of us have any credit cards, taken out loans, we have both always bought cars outright so the only thing showing on our credit reports are mobile contracts.

I get the impression when reading up on it that this won't look good to lenders as neither of us have proved that we can borrow money and pay it back on time. I have considered getting a credit card for some time, using it to pay for petrol and paying it off in full each month. Anyone recommend us doing this?

Any advice/experience on this would be greatly appreciated. Thanks

downhillfast

Leilab wrote: »

I have considered getting a credit card for some time, using it to pay for petrol and paying it off in full each month. Anyone recommend us doing this?

Yes, do this!

You are unlikely to get a credit card with any perks but it is worth checking using this tool just in case! If you do go for one of these cards and are then refused do not be surprised... and do not apply for any more of this type of card. Instead you'll need to be looking at a sub-prime card... these have extortionate APRs but as you will be paying off IN FULL every month you will not pay interest anyway!

I would definitely give getting a decent card a go first though as if you get it it'll look better on your credit report when you're going through mortgage applications - sub prime cards work but given the choice I rather a prospective mortgage lender see I was able to get credit through mainstream lenders.

Experian_company_representative

Hi Leilab,

Checking your credit report with all three of the credit reference agencies (Experian, Equifax and Call Credit) would be a great place to start if you are worried about applying for a mortgage.

Once you have the report you will be able to see exactly what is recorded. There may well be more information than you think, as current accounts and utility accounts are now often recorded.

If you find that there is already a healthy amount of accounts and history recorded then there would be no need to worry, if the report is on the "thin" side then you can start taking steps early to start to build it up.

It also gives you time should any unexpected information appear such as late payments to take appropriate action.

More information about your credit reports and mortgages can be found on our money matters page here

Kind Regards
Neil